In the above figure, what is the opportunity cost of one bushel of soybeans?
A) 1 bushel of corn
B) 0.5 bushels of corn
C) 2 bushels of corn
D) unable to determine
B
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The AD curve is:
A. the combination of money and velocity growth rates that add up to a constant amount. B. the combination of inflation rates and real growth rates that add up to a constant amount. C. vertical at the economy's long-run real GDP growth rate. D. horizontal at the economy's long-run inflation rate.
Initially, workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad, which causes domestic shoe prices fall. At the same time, foreign consumers purchase more computers, raising the relative price of computers. As a result of these changes, the demand for labor in the shoe industry ________ and the demand for labor in the computer industry ________.
A. decreases; increases B. increases; increases C. increases; decreases D. decreases; decreases
Suppose that at the beginning of a loan contract, the real interest rate is 4% and expected inflation is currently 6%. If actual inflation turns out to be 7% over the loan contract period, then
A) borrowers gain 1% of the loan value. B) lenders gain 1% of the loan value. C) borrowers lose 3% of the loan value. D) lenders gain 3% of the loan value.
In the steady-state diagram of the Solow model, an increase in saving per worker is shown by
A. shifting the saving-per-worker curve down, resulting in a lower steady-state capital-labor ratio. B. shifting the saving-per-worker curve down, resulting in a higher steady-state capital-labor ratio. C. shifting the saving-per-worker curve up, resulting in a higher steady-state-capital-labor ratio. D. shifting the saving-per-worker curve up, resulting in a lower steady-state capital-labor ratio.